This document outlines a presentation by Bank Degroof to VIVIUM Assurances on their global investment approach and behavioral value strategy. It introduces Bank Degroof as an independent merchant bank with over 24 billion euros in assets under management. It then details their global investment approach, which includes selecting funds across four risk profiles that match VIVIUM's existing funds. It outlines Degroof's asset allocation and risk management process, which balances risk and return across asset classes. Finally, it introduces their behavioral value strategy, which uses quantitative models and behavioral factors to select undervalued stocks.

1. BANK DEGROOF
Presentation for VIVIUM Assurances
Bruxelles Kinepolis
14th October 2010
Mr. Thomas-Karl Palmblad
14th October 2010

2. Agenda
1. Introduction of Bank Degroof
2. Introduction to Degroof’s Global Investment approach for VIVIUM
3. Introduction of Bank Degroof’s Behavioral Value strategy
4. Q & A
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3. Bank Degroof
 Independent merchant Bank, founded in 1871, owned by its
management
 24.1 bn EUR in assets under management
 Asset management produces 80% of income
 Headcount 1000
 Offices in Belgium (HQ), Luxembourg, Switzerland, France,
Spain and Bahamas
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4. MANAGEMENT AND STAFF HAVE A STAKE IN THE GROUP’S SUCCESS
1. Senior management owns a majority stake
in the bank. This gives them, in a long-term
approach, a vital interest in the bank's
performance and reputation
Management & staff include (1)
controlling stake held by Guimard Finance
and the Philippson, Siaens, Schockert,
Haegelsteen and Fontaine families, (2)
active partners and
(3) other members of management and staff
Management
and staff
Financial
2. Financial partners include Compagnie du
Bois Sauvage, Parmafin (Theo Maes
partners and others
63.85%
family), Luc Waucquez family, Levimmo
and others. Own shares represent 1.19 %
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36.15%

5. BANK DEGROOF’S REPUTATION IS BUILT ON THE EXPERTISE
MADE AVAILABLE TO ITS CLIENTS
Private clients
Institutional clients
Private wealth management
• Bank Degroof Brussel’s Institutional Portfolio
Management department, Degroof Fund Managament
Company and Degroof Gestion Institutionnelle (DGI)
are the Degroof group's competence centres for
institutional asset management
• Protect and grow
• Full support at all stages of wealth creation
• EUR 21.0 billion in assets under
management
• Management of EUR 15.9 billion in UCIs
• Management of EUR 2.9 billion of institutional
portfolios
Financial markets
• Specialists in legal, fiscal and inheritance
structuring
• Long-established financial market player
• Advice and sales to institutional clients in equities,
bonds, undertakings for collective investment, listed
derivatives and treasury management
• A leading liquidity provider on Euronext Brussels
Credits & Structuring
UCI administration
Legal and patrimonial structuring
• Credit facilities as part of overall asset
management relationships
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Public and private
companies and their
shareholders
Corporate Finance
• M&A expertise, recognized by various
rankings
• Dominant position in the issue of fairness
opinions
• One of the main financial advisers to the
Belgian state and regional governments for
privatisations and other major financial
operations
• Active role in private and public placements
for private companies and companies listed
on Euronext Brussels
Credits & Structuring
• Structured and tailor-made credits

6. OUR REPUTATION AND
PROFESSIONAL APPROACH
ENABLE US TO ATTRACT AND
RETAIN HIGHLY COMPETENT
PROFESSIONALS
• Our culture is that of top grade professionals,
working together in a climate of mutual trust and
respect to produce optimal, lasting solutions for
our clients
• This culture provides a stability stimulating
creative innovation
• We favour a long-term approach, with close
attention to financial fundamentals
• For example, the average length of service of
senior staff is 11.2 years
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7. Bank Degroof = excellent performance thanks to
• a clear and contrarian investment philosophy,
• inspired by academic research and, that is translated
• into disciplined investment processes by Teams
• through a "fundamental-quantitative” approach
• and with tight risk control
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8. VIVIUM, the switch to Degroof Active Management Styles
VIVIUM Managed Funds
4 Compartments
Degroof Active Funds
Selection of 4 Management Styles
Low
 Stability Fund
 Balanced Fund
Global Medium
 Dynamic Fund
Global High
 Aggressive Fund
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Global Low
Equities Europe
Behavioral Value
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Active
Risk
Level
High

9. VIVIUM, the switch to Degroof Active Managed Investment Processes
VIVIUM Managed Funds
4 Compartments
12 months return as at
30th September 2010
 Stability Fund
Return 1 Year : + 6.61%
 Balanced Fund
Return 1 Year : + 8.51%
 Dynamic Fund
Return 1 Year : + 9.89%
 Aggressive Fund
Low:
20%
Return 1 Year : + 5.31%
Equity
Level
High:
100%
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10. VIVIUM, the switch to Degroof Active Managed Investment Processes
VIVIUM Managed Funds
4 Compartments
Low:
20%
 Stability Fund
Tracking Error 1.92% Vol. 5.29%
 Balanced Fund
Tracking Error 2.92% Vol. 9.8%
 Dynamic Fund
Tracking Error 6.28% Vol. 15.5%
 Aggressive Fund
Tracking Error 5% Vol. 19.7%
Equity
Level
High:
100%
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11. ASSET
ASSET ALLOC
ALLOCATION
INTRODUCTION
•
DIVERSIFICATION
PERFORMANCE
CONCLUSION
3 RISK PROFILES
ASSETS UNDER MANAGEMENT (mio €)
GLOBAL LOW
2,500
1,918
2,000
GLOBAL MEDIUM
1,500
 GLOBAL HIGH
1,000
580
EQUITY RATIO
DEGROOF
GLOBAL ISIS
LOW
-
20%
ISIS LOW
DEGROOF
GLOBAL ISIS
MEDIUM
48%
DEGROOF
GLOBAL ISIS
HIGH
75%
0%
11
20%
347
500
40%
60%
80%
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100%
ISIS MEDIUM
ISIS HIGH

12. INTRODUCTION
•
ASSET
ALLOCATION
DIVERSIFICATION
PERFORMANCE
CONCLUSION
MEDIUM = Flagship Management of Banque Degroof, 1.92 billion euros
reflects the allocation strategy of medium risk
•
OBJECTIVE
OPTIMIZE THE RETURN
1. Allocation
between
assets classes
2. Diversification
within every
asset class
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80% OF THE RETURN
20% OF THE RETURN

13. INTRODUCTION
Offices
Commercial
Residential
ASSET
ALLOCATION
REAL ESTATE
CONVERTIBLE
BONDS
ALTERNATIVE
Flex Collar
Hedge Funds
Timber
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DIVERSIFICATION
PERFORMANCE
CONCLUSION
Govies / Agencies
Securitized
Corporates
Inflation linked
BONDS
EQUITIES
SHORT TERM
Currencies
Deposits
Commercial papers
Large caps
Small caps
Private Equity

14. INTRODUCTION
1.
ASSET
ALLOCATION
DIVERSIFICATION
PERFORMANCE
CONCLUSION
ALLOCATION : MEDIUM
(July 2010)
Low
High
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15. ASSET
ALLOCATION
INTRODUCTION
DIVERSIFICATION
PERFORMANCE
CONCLUSION
2. BENCHMARK
ISIS MEDIUM
60%
Max
58%
50%
Bench
48%
40%
Min
38%
38%
30%
28%
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R
ea
10%
8%
4%
0%
h
ds
2%
0%
C
as
le
st
at
at
iv
Al
te
rn
ds
Bo
n
v
C
on
Eq
u
iti
e
s
0%
e
6%
3%
0%
e
10%
18%
Bo
n
21%
16%
11%
20%
Low
High

16. INTRODUCTION
ASSET
ALLOCATION
DIVERSIFICATION
PERFORMANCE
3. ALLOCATION TOOLS (ASSETS CLASSES)
INVESTMENT COMMITTEE
MACRO-ECONOMY
-Growth: Europe, USA, Japan, Emerging countries
-Inflation :
CPI, PPI
Monetary aggegates
Commodities prices
World trade volume
Labor cost
-Short term interest
-Long term interest
-Exchange rates
-Equity markets  valorisations
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Leading indicators
Consummer confidence
Labour market
New orders
Inventories
Profitability
Real estate activity
Credits
CONCLUSION

17. INTRODUCTION
ASSET
ALLOCATION
PERFORMANCE
DIVERSIFICATION
CONCLUSION
3. ALLOCATION TOOLS (ASSETS CLASSES)
INVESTMENT COMMITTEE
FINANCIAL RATIOS
FIXED INCOME COMMITTEE
BONDS ALLOCATION
- Duration/Positioning
- Price/Earnings
- Earnings revision
- Govies-Inflation linked: Expected inflation
QUANTITATIVE TOOLS
- Credit: Corporate - govies:
- Allocation Equity-Bonds: Risk premium
- Sectors
- Allocation Blue-Small:
17
Real interest rate
Yield curve
- Countries
Relative P/E
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Rating/risk

18. INTRODUCTION
ASSET
ALLOCATION
DIVERSIFICATION
PERFORMANCE
4. STRATEGY
A. GLOBAL ALLOCATION
 Slightly overweighted in equity
 Underweighted in real estate
(%)
 Lower bonds duration
50
40
30
20
10
0
e
s
y
ve
ds
tat
uit
nd
ati
s
q
o
on
E
B
rn
B
le
lte
nv
ea
A
R
Co
Isis Medium
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Benchmark
sh
Ca
CONCLUSION

19. INTRODUCTION
ASSET
ALLOCATION
DIVERSIFICATION
PERFORMANCE
4. STRATEGY
B. EQUITY ALLOCATION
 Underweighted in Japan
25
(%)
20
15
10
5
0
a
ts
ro
uro
ri c
eu
mk
e
E
g
ex
Am
e
Em
h
p
rt
&
uro
No
E
sia
A
Isis Medium
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Benchmark
pa
Ja
n
CONCLUSION

20. INTRODUCTION
ASSET
ALLOCATION
DIVERSIFICATION
PERFORMANCE
4. STRATEGY
C. BOND ALLOCATION
(%)
Overweighted in corporate & securitized bonds
80
70
60
50
40
30
20
10
0
AAA
ISIS Medium
20
AA
Benchmark
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A
BBB
NR
CONCLUSION

21. INTRODUCTION
ASSET
ALLOCATION
DIVERSIFICATION
5. ASSET ALLOCATION: CONCLUSIONS
Based on long term views
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PERFORMANCE
CONCLUSION

22. INTRODUCTION
ASSET
ALLOCATION
1. NON EQUITY CLASSES
- BONDS
- FLEXIBLE COLLAR
- CONVERTIBLE
BONDS
- HEDGE FUNDS
- REAL ESTATE
- COMMODITIES
- OTHERS: TIMBER
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DIVERSIFICATION
PERFORMANCE
2. EQUITY CLASSES
- STYLES:
INDEXED
VALUE
GROWTH
…
- PRIVATE EQUITY
CONCLUSION

23. INTRODUCTION
ASSET
ALLOCATION
DIVERSIFICATION
PERFORMANCE
CONCLUSION
1. NON EQUITY CLASSES
MEDIUM
Real properties
4%
Conv bonds
3%
Equity
51%
Non equity
49%
Bonds
25%
Flex collar
14%
Hedge funds
1%
Timber
Cash
1%
Cash
2%
2%
Bonds 16.5% Govies,
 3.1% Inflation linked
 2.4% Corporates
3.7% Securitized
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24. INTRODUCTION
ASSET
ALLOCATION
DIVERSIFICATION
PERFORMANCE
CONCLUSION
2. EQUITY CLASSES
MEDIUM
Non equity
49%
Equity
51%
Index
31%
value
6%
third party
12%
private equity
1%
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25. INTRODUCTION
ASSET
ALLOCATION
DIVERSIFICATION
PERFORMANCE
DIVERSIFICATION: CONCLUSIONS
Based on convictions, on medium term views
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CONCLUSION

26. INTRODUCTION
1
ASSET
ALLOCATION
RISK CONTROL
MEDIUM
Risk
Control
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DIVERSIFICATION
PERFORMANCE
CONCLUSION

27. ASSET
ALLOCATION
INTRODUCTION
DIVERSIFICATION
PERFORMANCE
OPTIMISTIC SCENARIO
CONCLUSION
PESSIMISTIC SCENARIO
Positive years: 1993 - 2000
250
230
+25.5%
210
190
Negative years: 2000 - 2003
170
150
110
130
100
110
90
90
80
70
1993
1994
1995
1996
1997
Global bonds
1998
1999
2000
-10.1%
70
Isis Medium
60
Positive years: 2003 - 2007
50
150
40
2000
140
+36.5%
130
2001
Global bonds
2002
2003
Isis Medium
120
110
100
UPSIDE HIGHER THAN DOWNSIDE
90
80
2003
2004
2005
Global bonds
27
2006
Isis Medium
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2007

28. Bank Degroof’s
Behavioral Value strategy

29. Introduction to Bank Degroof’s Behavioral Value strategy
Unfortunately …
Cumulative value of British shares between 1955 and 2001
You are here
Source: “Capturing the Value Premium in the UK; 1955-2001” Dimson, Nagel & Quigley, LSE, January 2003
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30. Introduction to Bank Degroof’s Behavioral Value strategy
2. Quality of forecasting is a disaster
Behavioral Value deals with these flaws through
A. Strong buying and selling discipline
Obtained through a quantitative approach and improved by
behavioral criteria such as earnings revision momentum
B. Behavioral Value eliminates the analysts’ bias of
long term optimism
By introducing mean reverting in the valuation model/business plan
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31. Behavioral Value
The Wheel of Fortune – where Degroof is
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32. Risk Premium
Last update : 02/09/201
0
1
4.75%
DJ Stoxx 50 Earnings Yield Gap - Growth sensitivity
1
4.75%
No rmative RP = 2.90% ; Last = 1 4% ; 30/08/201 = 1
0.1
0
0.60%
1
3.75%
1
3.75%
1
2.75%
1
2.75%
1 .75%
1
1 .75%
1
1
0.75%
1
0.75%
9.75%
9.75%
8.75%
8.75%
7.75%
7.75%
6.75%
6.75%
5.75%
5.75%
4.75%
4.75%
3.75%
3.75%
2.75%
2.75%
1
.75%
1
.75%
0.75%
0.75%
-0.25%
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Risk P remium
32
No rmative RP
-25%
-1
5%
-5%
5%
1
5%
Stdev
Stdev
-35%
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Jan-1
0
-0.25%

33. Degroof Equities Europe Behavioral Value Gips
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34. Market snapshot
Source: Bloomberg 8th October 2010
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35. Outlook
Comparison to previous crises
Start
End
Return US Equity Market
Q4 1948
Q4 1949
-15%
Q2 1953
Q2 1954
-12%
Q3 1957
Q2 1958
-19%
Q2 1960
Q1 1961
-11%
Q4 1969
Q4 1970
-30%
Q4 1973
Q1 1975
-46%
Q1 1980
Q3 1980
-7%
Q3 1981
Q4 1982
-24%
Q3 1990
Q1 1991
-16%
Q1 2001
Q4 2001
-46%
Q1 2008 (?)
Q1 2009 (?)
-43%
Mean
-23%
Median
-17%
Source: Lehman Brothers, Global Strategy Outlook, 7 December 2007
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36. Outlook
Equities
Performance US equities 12 months after bear market bottom
Bottom reached at
8 July 1932
171%
31 March 1938
29%
28 April 1942
54%
19 May 1947
19%
13 June 1949
42%
22 October 1957
31%
26 June 1962
33%
7 October 1966
33%
26 May 1970
44%
3 October 1974
38%
12 August 1982
58%
4 December 1987
21%
11 October 1990
29%
9 October 2002
9 March 2009
34%
Oct 8, 2010 +68%
Average
45%
Median
33%
Source: Global Financial Data
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37. Contact details
Thomas Palmblad,
Institutional & Corporate Desk
Rue de l’Industrie 44
1040 Bruxelles
E-mail: TKP@degroof.be
Phone: +32 2 287 93 27
www.degroof.be
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